Increased Unemployment Benefits = Increased Unemployment

Alan Reynolds outlines a very basic economic concept: longer limits (and increased benefits) for taxpayer-funded unemployment compensation – as was mandated in the federal stimulus, and repeated by Congress again – results in higher unemployment.

In reality, the evidence is overwhelming that the February stimulus bill has added at least two percentage points to the unemployment rate. If Congress and the White House hadn’t tried so hard to stimulate long-term unemployment, the US unemployment rate would now be about 8 percent and falling rather than more than 10 percent and — rising.